Tenth Circuit Ruling Gives Limited Water Supplies to Silvery Minnow Ahead of Irrigation Districts and Cities In New Mexico

By James P. Walsh
[July 2003]

In a decision that is already making big new political waves in Congress over the impact of the Endangered Species Act on the allocation of scarce water supplies in the West, the Tenth Circuit Court of Appeals on June 12, 2003 ruled that the Bureau of Reclamation (BOR) has the legal discretion to reduce contract deliveries and restrict diversions of water to irrigation districts and cities in New Mexico to protect the Rio Grande silvery minnow, a fish species subject to protection under the Endangered Species Act (ESA), 16 U.S.C. 1531-1544. Rio Grande Silvery Minnow v. Keys, __F.3d __, 2003 WL 21357246. The Court thereby upheld a directive by the district court that, to meet flow requirements for protection of the silvery minnow, the BOR must reduce contract deliveries and diversions to its customers, including the City of Albuquerque. In other words, because of the ESA’s mandate, all other increasing uses of declining water supplies are secondary to the need to ensure the survival of endangered species.

Congressional representatives from New Mexico have already introduced bills in both the Senate and the House of Representatives to overturn the impact of the Tenth Circuit ruling, legislation that would limit the ability of the federal government to allocate oversubscribed water supplies contracted for by cities and farms to the protection of endangered species.

The Rio Grande silvery minnow is reputed to have been one of the most common species of fish found in the Rio Grande River below Espanola, N.M. to the Gulf of Mexico. However, the species has disappeared from about 95 percent of its original habitat, mainly because of water diversions for other uses, man-changes in the river habitat, non-native fish competition and pollution. Five main-stem dams were built on the river after 1916, all in silvery minnow habitat. As a consequence, the species was listed by the Secretary of the Interior as an endangered species under the ESA in 1994. In 1999, 163 miles of the main stem of the Rio Grande, from Cochiti Dam to Elephant Butte was designated as “critical habitat.” These actions require that no federal agency, such as the BOR, may take any action that would jeopardize the continued existence of the species or result in the destruction or adverse modification of its critical habitat. 16 U.S.C. 1536(a)(2).

The conflict arises because the requirements of the ESA were imposed on a river system in which all of the water was fully appropriated, meaning that legal rights for other beneficial uses were held for all of the river’s surface waters. Middle Rio Grande Conservancy District v. Babbitt, 206 F.Supp.2d 1156, 1179 (D.N.M. 2000). The ESA requires that all federal agencies have an affirmative duty to use their discretionary authority to protect endangered species as a priority over their primary missions. Tenn. Valley Auth. v. Hill, 437 U.S. 153, 185 (1978). The legal issue resolved by the Tenth Circuit is whether the applicable water legislation and contracts for the river provided the BOR with the authority and discretion to limit other users in favor of the silver minnow. It was clear that the limited amount of available water, if other users were not restricted, would mean that the biological flow requirements for the fish would not be met in 2003.

After reviewing the relevant statutes, the water contracts, case law, and three cases decided by the Ninth Circuit that were claimed to stand for the opposite proposition, the Tenth Circuit found that the BOR did have discretionary authority to act to protect the silvery minnow under the ESA.

Analysis

While this controversy is generally not unlike other ESA disputes, such as the fight between farmers and fishermen over the Klamath River water supplies in Oregon and California, the interpretation of federal water supply contracts as providing discretion to make water available to endangered species first is further new development in the administration of the ESA. In the Klamath litigation, the Ninth Circuit had ruled that irrigators did not have standing to contest the water allocations for endangered species because they were not third-party beneficiaries of the BOR water contract for the river. Klamath Water User’s Protective Ass’n v. Patterson, 204 F.3d 1206 (9th Cir. 1999). The Ninth Circuit also ruled that the ESA had modified the contractual arrangements for the Klamath Basin water project and allows the BOR to override the water rights of the irrigators. In the Tenth Circuit litigation, BOR had argued that its contracts did not allow it to reduce deliveries to its customers below certain fixed amounts. The Tenth Circuit three judge court, disagreed, with one dissenting judge.

This case is another reminder that the ESA remains the most powerful piece of environmental law in the nation. In California alone, there are more than 200 listed species of endangered or threatened animals and plants. Nearly the entire state is the subject of some species’ critical habitat. Oregon and Washington also have many protected species and habitat, most notably several species of salmon. As growth in the West continues and as both natural habitat and available water get used up by human development, the clashes over the ESA are sure to only escalate.

Any questions about this Advisory should be directed to:

James P. (Bud) Walsh, San Francisco, (415) 276-6556, budwalsh@dwt.com

This Environmental Law Advisory is a publication of the Environmental Law Department of Davis Wright Tremaine LLP. Our purpose in publishing this Advisory is to inform our clients and friends of recent developments in environmental law. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations.

Copyright © 2003, Davis Wright Tremaine LLP.

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